The Hindu : Printing inks: MNCs' entry helps domestic players

Online edition of India's National Newspaper
Friday, Dec 26, 2003

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Business

Printing inks: MNCs' entry helps domestic players

By Ramnath Subbu

MUMBAI DEC. 25. The Indian printing inks industry has been a major beneficiary of the entry of multinational players and in a short span, has seen almost all leading global players in the industry set up operations here.

DIC of Japan, the world's leading inks company, is present in India through Coates of India, the leading Indian company for many decades. The second largest player, Flint, has joined Incowax as a JV partner, Sakata of Japan has set up a new plant near Delhi for packaging inks and Sicpa, a leader in security inks, is well established and a major supplier of security inks to the Indian Government. BASF and Sericol, producers of specialised screen inks, are also here. Among the several domestic players, Hindustan Inks stands out as the first Indian inks multinational, which has large capacities in India and now in the U.S. too.

At present, 80 per cent of the units are in the organised sector, the remaining being in the fragmented unorganised sector. "The Rs. 1,000 crore Indian printing inks market is growing at about 15 per cent per annum and in volume terms, it has grown from 70,000 tonnes in 2000 to 1.02 lakh tonnes," Ajit Lalvani, President, All India Printing Ink Manufacturers' Association (AIPIMA), told The Hindu. There are only a handful of major domestic ink makers — United Inks, Rainbow Inks and Organic Coatings — but all of them are in the Rs. 15-20 crore turnover size leaving only Hindustan Inks as the player with any real critical size. "The international majors have brought with them newer technologies, processes and materials. For example, UV curing is a commonly used process worldwide but here it has started only now. Ink curing gives finer print quality and gives quick drying," said Mr. Lalvani.

Internationally, the trends are towards ultraviolet inks and coating requirements are growing. Water-based flexo inks are widely used as is digital ink. "The price realisations are still good and the market is estimated in excess of Rs. 100 crores and growing rapidly," said Mr. Lalvani.

However, while the government has recognised printing inks as an industrial product, last year it started imposing the maximum retail price (MRP), which is imposed only on consumer products. "All this time we have had exemption from MRP. So this is indeed strange," felt Mr. Lalvani.

Tax anomaly

The industry is also adversely affected by the tax structure. "The imposition of sales tax is erratic — from nil in Delhi to 15 per cent in Bangalore — there is a wide variance. There is also a 5.5 per cent octroi and freight charge. Excise incidence is 16 per cent and we have asked for a reduction to 8 per cent," said Mr. Lalvani. Mr. Lalvani felt that raw material imports, which attract customs duty of above 30 per cent, should be reduced. "If that happens and we are given a level playing field, production could easily double."

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